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S&P Affirms Türkiye’s Successful Economic Plan

People shop at Grand Bazaar in Istanbul, Türkiye, November 4, 2022. REUTERS/Dilara Senkaya
People shop at Grand Bazaar in Istanbul, Türkiye, November 4, 2022. REUTERS/Dilara Senkaya
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S&P Affirms Türkiye’s Successful Economic Plan

People shop at Grand Bazaar in Istanbul, Türkiye, November 4, 2022. REUTERS/Dilara Senkaya
People shop at Grand Bazaar in Istanbul, Türkiye, November 4, 2022. REUTERS/Dilara Senkaya

Credit ratings agency S&P on Friday moved Türkiye’s long-term sovereign rating one notch higher to B+ from B, with a positive outlook, according to a statement late Friday.

The ratings agency then forecasted rising portfolio inflows and narrowing current account deficits over the next two years, alongside declining inflation and dollarization.

“Following local elections in Türkiye, we believe the coordination between monetary, fiscal, and incomes policy is set to improve, amid external rebalancing,” it said.

The agency said Turkiye's policymakers are set to persevere with efforts to reduce elevated inflation through a combination of monetary and credit tightening, less generous wage settlements, and gradual fiscal consolidation.

Türkiye has launched a series of steps meant to cool soaring inflation, which could reach around 75% in May when the government ends its plan to provide a monthly reduction on natural gas bills. Ahead of the 2023 parliamentary and presidential elections, the government has promised discounted natural gas bills for households for a year until May 2024.

S&P Global Ratings raised the country's rating outlook to positive in November in a move to recognize Türkiye’s shift to more orthodox economic policies and the central bank's steep rate hikes, made to rein in inflation, which climbed to 69.8 percent year-on-year in April despite raising the policy rate to 50 percent.

Türkiye ranks fourth in global inflation rates, surpassed by Argentina, Syria and Lebanon.

Fitch Ratings upgraded the country’s credit rating earlier this year to B+ while Moody’s raised its outlook to positive at the same time as affirming its B3 ranking.

Mehmet Şimşek, the Turkish treasury and finance minister, earlier cited his expectations for credit upgrades to continue in March following Fitch’s move.

“The positive outlooks of S&P, Fitch and Moody’s foreshadow further rating increases,” Simsek said Saturday in a post on X, formerly Twitter.

“The positive results of our program are reflected in the decisions of credit rating agencies,” he added.

“We are determined to carry the confidence in our country to the highest level with our strengthened program,” the minister also said.

Meanwhile, Burak Daglioglu, head of theTurkish Presidency Investment Office, said Türkiye last year rose to fourth place in Europe in attracting the most international investment projects.

“The $10.6 billion in international direct investment we attracted in 2023 is the most concrete sign of this success,” Daglioglu noted.

Commenting on a report by audit and consulting firm EY on foreign direct investment (FDI) projects in Europe in 2023, Daglioglu said Türkiye has maintained its steady rise in attracting the most international direct investment in Europe in the post-pandemic period.

He said EY found a significant fall from the previous year in FDI projects in Europe for the first time since the pandemic, blamed on factors such as low economic growth, high inflation, rising energy prices, and geopolitical risks.

He said 5,694 investment projects were announced in Europe, down 4% from the previous year.

The number of projects in Europe was 11% below its level in 2019 and 14% below the 2017 peak, according to Daglioglu.

He added that Türkiye ranked seventh in the European league in 2020 and fifth in 2022. “The country rose to fourth among the top 10 countries, attracting 375 international direct investment projects in 2023. With a 17% rise from the previous year, Türkiye also ranked first among the top 10 countries in terms of growth in 2023,” Daglioglu said.

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Business

Lucid Group to Asharq Al-Awsat: Saudi EV Market Gaining Strong Momentum

Lucid studio in Al Khobar city. (Lucid)
Lucid studio in Al Khobar city. (Lucid)
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Lucid Group to Asharq Al-Awsat: Saudi EV Market Gaining Strong Momentum

Lucid studio in Al Khobar city. (Lucid)
Lucid studio in Al Khobar city. (Lucid)

Current geopolitical tensions and disruptions in global oil markets are driving a sharp rise in electric vehicle sales across much of the world.

Brent crude’s rise above $120 a barrel has prompted consumers to rethink their purchasing habits, turning to electric vehicles as a more stable and efficient alternative to fuel price volatility.

In March, during the first four weeks since the start of the war on Iran, major European markets, France, Germany, and the United Kingdom, saw purchases of about 206,200 electric vehicles, up 44% year on year. Sales doubled in South Korea, while Italy recorded 67% growth, according to Bloomberg data.

President of Lucid Motors in the Middle East Faisal Sultan told Asharq Al-Awsat that Saudi Arabia’s electric vehicle market, “although still in its early stages, is witnessing strong and accelerating momentum.”

He said Lucid continues to expand its presence in the Kingdom, alongside gradual growth plans in other Gulf Cooperation Council countries, as the market takes shape quickly, driven by government support, expanding charging infrastructure and growing consumer awareness of the importance of shifting toward sustainable transport.

Sultan said EV adoption continues to rise globally and regionally, including in Saudi Arabia, where the sector’s operating foundations are being strengthened. Structural drivers supporting the shift include Vision 2030 and the Saudi Green Initiative.

This path is backed by a clear national commitment to building an integrated mobility ecosystem, including major investments in local manufacturing and the expansion of charging infrastructure, providing a solid base for long-term demand, he remarked.

The shift toward electric vehicles is not only tied to demand dynamics, but also to changing consumer awareness of “the long-term value of owning these vehicles, including total cost of ownership and the ease of home charging,” he added.

Lucid has installed more than 100 AC chargers across the Kingdom, available free of charge, and continues to expand fast-charging services, he revealed.

Strategic investments

Against this backdrop, Lucid raised its total liquidity to about $4.7 billion, giving it financial runway into the second half of 2027, according to financial results announced on Monday.

The company said the capital raise included $550 million in convertible preferred stock from Ayar Third Investment Company, a Saudi Public Investment Fund affiliate, and a $200 million equity investment from Uber, increasing Uber’s total investment in Lucid to $500 million.

The sovereign-backed support comes as Lucid reported quarterly revenue of $282.5 million, below analysts’ estimates, due to an unexpected supplier-related technical issue involving seats in the Gravity model.

The issue temporarily disrupted deliveries before momentum resumed in March, while net losses stood at about $1.13 billion.

Production growth in Saudi Arabia

Operationally in Saudi Arabia, Lucid’s first-quarter 2025 results showed production of 2,212 vehicles across its plants in the Kingdom, in addition to more than 600 vehicles in transit. The company delivered 3,109 vehicles during the same period, up 58.1% from the corresponding period in 2024.

Revenue reached $235 million, while GAAP net loss stood at about $0.20 per share, compared with an adjusted loss of $0.24 per share. The company ended the first quarter with total liquidity of $5.76 billion.

Operational challenges

On deliveries, Lucid recorded about 3,093 vehicle deliveries as of March 31, compared with production of nearly 5,500 units, reflecting a temporary operational gap between production and deliveries.

Lucid said Gravity deliveries were disrupted for 29 days because of a supplier quality issue with second-row seats, which has since been addressed.

Sultan attributed the gap to a temporary disruption in one of the supply lines for the Lucid Gravity, caused by the second-row seat quality issue, and stressed that the problem had been fully contained and that operations had resumed normally.

He told Asharq Al-Awsat that supply chains remain dynamic, and that dealing with such challenges has become an essential part of developing the automotive business.

He added that Lucid’s strategy is based on strengthening resilience and adaptability by diversifying global supply sources, reducing costs and relying on a flexible, vertically integrated platform capable of responding to supply chain fluctuations.

He said the company faced three consecutive industry-wide crises last year involving magnetic materials, aluminum and semiconductors, and handled them quickly thanks to the flexibility of its engineering teams and manufacturing capabilities.

Sultan stressed that these challenges were operational and supply-chain related, and did not reflect weaker demand. Rather, they came within a framework of proactive management aimed at strengthening operational stability and ensuring continuity in production and deliveries.

Business

G7 Trade Talks Target Critical Minerals as US-EU Tariff Rift Strains Unity

(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL
(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL
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G7 Trade Talks Target Critical Minerals as US-EU Tariff Rift Strains Unity

(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL
(L-R): EU commissioner for trade and economic security Maros Sefcovic, German Economy and Energy Minister Katarina Reiche, British State Secretary in charge of Trade Peter Kyle, US representative for Trade Jamieson Greer, French minister for trade Nicolas Forissier, Canadian state secretary in charge of international trade Maninder Sidhu, Italian Vice-Minister of Foreign Affairs and International Cooperation Maria Tripodi and Japanese Foreign Affairs delegate Minister Iwao Horii and Japanese Economy and Trade Minister Ryosei Akazawa prepare to pose for a group picture during the G7 Trade ministerial meeting in Paris, France, 06 May 2026. EPA/CHRISTOPHE PETIT TESSON / POOL

Group of Seven trade ministers meeting in Paris on Wednesday sought common ground on securing critical mineral supplies that are dominated by China, but fresh US tariff threats against European Union-made cars risked straining unity.

France wants critical minerals supplies to be among the most concrete deliverables during its G7 presidency as ministers prepare for a leaders' summit in mid-June, Foreign Trade Minister Nicolas Forissier ‌said as ‌he arrived for talks.

"I believe we will ‌make ⁠very concrete progress ⁠on rare earths and critical minerals, securing our supply chains and ensuring we are not held hostage by certain countries," he said.

Officials involved in the discussions said there was broad agreement on the need to reduce reliance on China, but significant differences remained about how to do so, said Reuters.

G7 unity is also being ⁠tested by comments from US President Donald Trump, who ‌said Washington would raise tariffs on ‌EU-made cars to 25% from 15%, arguing that Brussels was ‌not complying with a trade deal that was agreed upon ‌in Turnberry, Scotland, last year.

German Economy Minister Katherina Reiche said that she was in intensive talks with US officials over the tariffs. Germany's export-dependent automotive sector has already been under strain from weakening demand in China, ‌slower global growth and higher input and labor costs.

EU Trade Commissioner Maros Sefcovic said he and ⁠US Trade Representative ⁠Jamieson Greer had discussed the Turnberry agreement at a meeting in Paris on Tuesday and that he would be heading to the European Parliament, where negotiations on EU legislation related to the trade deal will take place later on Wednesday.

"We both clearly concluded that it's important to respect the deal from Turnberry from both sides, so we have to deliver on what was promised in Scotland," Sefcovic said.

The trade ministers are also expected to discuss industrial overcapacity - China being the main source - and reform of the World Trade Organization, Forissier said.

Business

Gulf Markets Higher as US-Iran Ceasefire Holds

An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)
An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)
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Gulf Markets Higher as US-Iran Ceasefire Holds

An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)
An investor watches a stock screen at the Saudi Stock Exchange in Riyadh (AFP)

Saudi Arabia's ⁠benchmark stock ⁠index rose 0.4% on Wednesday, with most constituents trading in positive territory. Gains were led by information technology, materials and healthcare stocks.

Saudi Arabian Mining Co added 4.5%, while Arabian Mills for Food Products surged 8% after reporting a 32% rise in first-quarter net profit.

US President Donald Trump said he would briefly pause an operation escorting ships through the Strait of Hormuz, a key waterway that carries about a fifth of global oil supplies and has been blockaded by Iran since late February, triggering a global energy crisis.

So the fragile US-Iran ceasefire held firm despite a fresh flare-up in tensions, allowing investors to turn their attention back to corporate earnings.

Dubai's benchmark stock index rose 1.5%, rebounding from losses in the previous session.

Among individual stocks, blue-chip developer Emaar Properties gained 1.7%, while Dubai's largest lender, Emirates NBD, added 1.5%.

The Abu Dhabi benchmark index advanced 0.5%, with most constituents trading higher. ⁠Gains were led by utilities, healthcare and technology shares.

Presight AI Holding jumped 5%, while Alpha Dhabi climbed 2.3%.

The Qatari benchmark index edged up 0.3%, as most stocks traded higher. Industries Qatar gained 0.7%, while Qatar Fuel Co added 0.6%.